29 companies enter club of billion-dollar revenue giants

Tags: Companies
The annual financial results of 3,078 companies have revealed that five out of every 100 companies, or a total of 151, listed on the Bombay Stock Exchange are in the elite club of billion-dollar firms by revenue in the year ended March 31, 2011.

This is an increase from the past two years when 127 firms (4 of 100) and 97 companies (3 of 100) figured in the league in FY10 and FY09 respectively.

The 29 companies that stormed into the billion-dollar revenue club in FY11 include Hindustan Constr­uction ($1.60 billion), Alok Industries ($1.42 billion) Sh­ree Ganesh Jewellers ($1.31 billion), Sun Pharma ($1.28 billion) and Chambal Fertilisers ($1.27 billion). Many financial institutions too entered the elite group last year, including SBT, Dena Bank, Punjab & Sind Bank, SBBJ and LIC Housing Finance.

“These mid-cap state-run lenders have not grown significantly. It could just be their normal growth that have helped them reach the landmark,” said Pankaj Pandey, head of research at ICICI Securities.

Net revenue of Dena Ba­nk, SBBJ and SBT have gro­wn only 25 per cent, 20.60 per cent and 19.43 per cent year on year, respectively, in FY11 compared with 30-70 per cent growth for private lenders. Of the 151 firms, 75 generated revenue over $2 billion, 34 earned more than $5 billion and 15 reported revenue above $10 billion compared with FY10 when 62 firms reported revenue equal or above $1 billion, 29 earned more than $5 billion and 11 companies posted revenue above $10 billion.

The 29 new entrants contributed $32.87 billion in re­venue to a total of $754.49 billion generated by the 151 companies. Among them were Bharat Forge and Exide Industries, both from the auto ancillary sector.

“Automobile sales grew healthy in 2010-11 but profits were under pressure. And therefore the rise in top line of auto companies has been reflected in the results of these two ancillary compa­nies,” said Jagannadham Th­unuguntla, strategist and head of research at SMC Global Markets.

The revenue generated by these billion-dollar companies account for 76.34 per cent of the total revenue of $988.38 billion generated by BSE firms at an exchange rate of Rs 44.585 to a dollar.

UltraTech Cement, Sesa Goa, PTC India and Power Finance Corporation were among the companies that generated revenue of at least $2 billion for the first time.

Some companies dropp­ed out of the elite club. Amo­ng them are Punj Lloyd, Jindal Saw, Simplex Infra, Sundaram Clayton and state-r­un ITI. Punj Lloyd had reve­nue of $2.33 billion in FY10. “Punj Lloyd has been reporting poor results for the past 5-6 quarters. They have a big order book but poor execution. The firm has received big orders from Libya, whose fate is uncertain,” said Sudip Bandyopadhyay, president at Destimoney.

In terms of net profit too there were more companies in the billion-dollar league in FY11 at 22 compared with 14 in the previous year, a jump of 57.14 per cent. Of that, eight firms earned net profit of $2 billion or more while ONGC remained the only firm with net profit over $5 billion. The firms to enter the billion-dollar league in terms of net profit include Tata Motors ($2.08 billion), Tata Steel ($2.01 billion), NMDC ($1.46 billion) and Bhel ($1.36 billion). ITC, Sterlite Industries, HDFC, PNB and HDFC are some of the others in that list. These 22 companies contributed $40.14 billion, or 57 per cent, of the total net profit of $71.01 billion of BSE firms.

Companies with more than $2 billion in net profit include Coal India ($2.44 billion), NTPC ($2.40 billion) and SBI ($2.10 billion). RCom is the only company that was part of the $1 billion net profit club that did not make it even to the $1 billion league this year. Bandyopadhyay said RCom results were under pressure on heavy de­bt problems and persistence of several regulatory issues.

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